VoIP Key to Boosting Broadband Adoption

Internet telephone service could be crucial in promoting the adoption and development of broadband, according to a market research firm.

Internet telephone service could be crucial in promoting the adoption and development of broadband, according to a new white paper from Parks Associates, a market research firm focusing on home connectivity.

Entitled “VoIP: At Last a Killer App?,” the paper found the average narrowband household could capture a net savings of $8 per month if they upgraded to broadband and began using a VoIP telephone service. This service combination, the report noted, could eliminate cost as an obstacle to greater broadband adoption.

“Among narrowband households not interested in broadband, almost 60 percent cite price as the main deterrent,” said John Barrett, analyst with Parks Associates. “VoIP changes that equation by offering an overall net savings if you upgrade to broadband.”

To realize these savings, however, households would have to abandon traditional phone service completely. If a household uses VoIP service only as a second line and keeps its existing phone service, it would pay $30 more each month.

Barrett also cautioned that pricing, packaging, and FCC regulations could tip the scales one way or another. “Eight dollars is not a tremendous margin,” he said.

“If regulatory changes cause the cost of VoIP to increase by just a few dollars per month, the incentive to switch disappears. Most people will not go to the trouble if it saves only a couple bucks per month.”